Gem, Tsingshan to form Chinese battery joint venture

Chinese battery material manufacturer Green Eco-Manufacture (Gem) will form a joint venture with stainless steel producer Tsingshan to produce ternary cathode materials for lithium-ion batteries.

Gem's wholly-owned subsidiary Jingmen Gem and Tsingshan's Yongqing Technology arm will form a 60:40 joint venture, Fuan Qingmei Energy Material, to operate the plant in Ningde, Fujian province. The two firms will invest up to 1.85bn yuan ($270mn) in the venture.

The initial target is to produce 50,000 t/yr of ternary precursor and 20,000 t/yr of nickel-cobalt-manganese (NCM) cathode material. Site construction will be completed two years after government approvals are granted. The project investors may raise production further, depending on market conditions.

NCM batteries are expected to be the mainstream power source for new energy vehicles (NEVs) in the next 20 years. A fast move towards high-nickel-content NCM batteries is likely to increase nickel demand in the longer term.

Gem made a profit of Yn411mn in the first half of this year, 51pc higher from a year earlier. Profit was boosted by increased revenues from the company's battery business and its cobalt, nickel and tungsten operations, which rose by 98pc to Yn4bn and by 55pc to Yn1.53bn respectively.

Gem signed a three-year cobalt offtake agreement with Switzerland-based mining and trading company Glencore in March, tying up increasingly tight supplies of cobalt for use as feedstock in its production of ternary battery materials.

Tsingshan is a fully integrated stainless steel producer. It also produces nickel ore, ferro-nickel and ferro-chrome and owns several nickel mines in Indonesia with total reserves of around 12mn t.

Prices of 99.8pc grade cobalt metal rose by Yn5/kg at the low end of the range to Yn475-500/kg yesterday, as demand for battery cathode materials increased slightly.

The range for 99.9pc grade nickel metal widened to Yn104,500-108,000/t yesterday. Prices for high-quality nickel ingots produced by domestic smelters remained high, but lower-priced imported metal was also available.